1) Five years ago, you borrowed $250,000 for a ten-year period at a fixed interest rate of 9% p.a. with interest compounded on an annual basis. You have been making regular annual payments on your loan and you now wish to repay in full the amount outstanding on this loan. The total amount you need to repay is closest to: Group of answer choices $151,521. $168,850. $194,775. $217,051.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
icon
Related questions
Question

Please answer all 5 question if possible, thanks. 

1)
Five years ago, you borrowed $250,000 for a ten-year period at a fixed interest rate
of 9% p.a. with interest compounded on an annual basis. You have been making
regular annual payments on your loan and you now wish to repay in full the amount
outstanding on this loan. The total amount you need to repay is closest to:
Group of answer choices
$151,521.
$168,850.
$194,775.
$217,051.
2)
Which of the following statements are most likely to be true?
The only factor that has an impact on a bond's price is its yield to
maturity.
Bond prices and market interest rates move in the opposite direction.
As time passes and a bond approaches its maturity date, its (ex-coupon)
price will converge to its face value.
I.
I.
4)
Group of answer choices
I and Il only.
I and III only.
Il and III only.
I, Il and III.
Ninety days ago, you purchased a 180-day Treasury bill with a face value of
$100,000. At that time, the yield to maturity on the bill was 4.0% p.a. The current
yield to maturity on the bill is 5.0% p.a. The price of the bill today is closest to:
Group of answer choices
$97,594.
$98,066.
$98,782.
$99,023.
3)
A company has a bank loan outstanding that requires it to make annual payments
of $1,000,000 at the end of each of the next three years. The bank has offered to
the company to skip the next two payments and instead make a single payment at
the end of the loan's term in three years' time. If the interest rate on the loan is 6%
p.a., compounded quarterly, the final payment that will make the
company indifferent between the two payment options is closest to:
Group of answer choices
$2,666,283.
$2,673,012.
$3,183,600.
$3,187,856.
5)
The bonds of a company have a face value of $1,000, pay an annual coupon of 8%,
and have 6 years remaining to maturity. If the market price of these bonds today is
$1,033 their yield to maturity is closest to:
Group of answer choices
7.1%.
7.3%.
8.3%.
8.5%.
Transcribed Image Text:1) Five years ago, you borrowed $250,000 for a ten-year period at a fixed interest rate of 9% p.a. with interest compounded on an annual basis. You have been making regular annual payments on your loan and you now wish to repay in full the amount outstanding on this loan. The total amount you need to repay is closest to: Group of answer choices $151,521. $168,850. $194,775. $217,051. 2) Which of the following statements are most likely to be true? The only factor that has an impact on a bond's price is its yield to maturity. Bond prices and market interest rates move in the opposite direction. As time passes and a bond approaches its maturity date, its (ex-coupon) price will converge to its face value. I. I. 4) Group of answer choices I and Il only. I and III only. Il and III only. I, Il and III. Ninety days ago, you purchased a 180-day Treasury bill with a face value of $100,000. At that time, the yield to maturity on the bill was 4.0% p.a. The current yield to maturity on the bill is 5.0% p.a. The price of the bill today is closest to: Group of answer choices $97,594. $98,066. $98,782. $99,023. 3) A company has a bank loan outstanding that requires it to make annual payments of $1,000,000 at the end of each of the next three years. The bank has offered to the company to skip the next two payments and instead make a single payment at the end of the loan's term in three years' time. If the interest rate on the loan is 6% p.a., compounded quarterly, the final payment that will make the company indifferent between the two payment options is closest to: Group of answer choices $2,666,283. $2,673,012. $3,183,600. $3,187,856. 5) The bonds of a company have a face value of $1,000, pay an annual coupon of 8%, and have 6 years remaining to maturity. If the market price of these bonds today is $1,033 their yield to maturity is closest to: Group of answer choices 7.1%. 7.3%. 8.3%. 8.5%.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Public Issue
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning